Why Is DeepSeek Raising Another $7 Billion
Just Months After Its First Round?

Timeline: From "No Fundraising" to a $70 Billion Valuation in Four Months

• April 2026: A corporate filing shows DeepSeek increased its registered capital and founder Liang Wenfeng personally subscribed to the new shares, raising his direct stake from 1% to 34%. Combined with an entity he controls, his total control over the operating company reached roughly 84.29% — the ownership structure that would later shape how outside capital entered the company. That same month, DeepSeek opened its first-ever external funding round and previewed its V4 model series.
• June 2026: The first round closed at roughly $7.4 billion, giving DeepSeek a post-money valuation reported in a range of $52–59 billion across sources — the largest first-round raise in Chinese AI history. Liang personally contributed roughly $2.8 billion; Tencent put in about $1.4 billion, CATL about $0.7 billion, with JD.com, NetEase, IDG Capital and China's National AI Industry Investment Fund also participating.
• July 14–17, 2026: Multiple outlets reported DeepSeek had begun preparing a STAR Market (Shanghai) IPO and was simultaneously in talks for a second round at a pre-money valuation of roughly $71 billion — about 37% above the first round's post-money value. This is also when DeepSeek's annualized revenue (ARR) — reportedly $400–500 million, mostly from API token usage — became public for the first time.
• July 25–26, 2026: The second-round talks abruptly paused. According to Bloomberg and other outlets, part of the reason was that founder Liang Wenfeng was unhappy that comments he made during closed-door investor meetings had circulated online; DeepSeek reportedly told some investors on the standby list to hold off on signing.
• August 4–5, 2026: Dealmakers cited by Chinese business magazine Caijing said the round had restarted, still targeting roughly $7 billion at a pre-money valuation of roughly $70 billion, with signing expected in late August. Both DeepSeek and the investors reportedly want to keep this round low-profile.

The Numbers at a Glance

ARR is mostly API token usage and comes from media reports, not an official disclosure. Gross margin is unverified by independent audit. P/S compares with OpenAI at ~65x and Anthropic at ~21x per dealmaker estimates. MAU methodology is undisclosed.

Inside the Deal: Why the Math — and the Voting Rights — Don't Add Up Cleanly

The real bill is compute, not headlines

Shortly after closing its first round, DeepSeek said it would double headcount across data-center and AI-agent teams, and Reuters reported it was hiring chip-design engineers to develop its own AI inference chips. Industry analysts estimate that roughly 70% of every dollar DeepSeek raises goes straight into compute-related spending — chips, data centers, bandwidth, liquid cooling. The fundraising cadence isn't really about valuation bragging rights; it's a race to keep pace with its own compute buildout.

Most investors don't get a vote

In the first round, most outside capital flowed in through a limited partnership controlled by Liang Wenfeng, meaning those investors received no voting rights and are locked in for five years. The one exception: China's National AI Industry Investment Fund, which invested directly and got both voting rights and no lock-up. This structure keeps Liang's control near 84% — and it's exactly the kind of detail that has drawn scrutiny from outlets like Forbes about governance and state influence, even as the company serves a global user base.

A 148x price-to-sales ratio is either a bet on the future — or a red flag

At a $70 billion pre-money valuation against $400–500 million in ARR, DeepSeek's implied P/S ratio sits around 140–150x, dwarfing OpenAI's ~65x and Anthropic's ~21x. One dealmaker's assessment, translated from Chinese coverage, is blunt: "Pricing a foundation-model company is fundamentally an options bet, not a cash-flow valuation." Investors aren't pricing today's revenue — they're pricing the chance that DeepSeek becomes infrastructure-level in China's compute ecosystem and enterprise agent market.

How DeepSeek Stacks Up Against Moonshot, Zhipu, MiniMax — and OpenAI / Anthropic

The pattern: DeepSeek and Moonshot — the two still-private frontrunners — both carry P/S multiples around 140–150x, well above what the already-listed Zhipu and MiniMax trade at in the secondary market. Private-market investors are, for now, paying a steeper premium for the two labs that haven't yet faced public-market scrutiny.

The Controversy: A Leaked Transcript, an Unhappy Founder, and Bubble Warnings

1. A leaked closed-door transcript stalled the deal. The immediate trigger for the July pause was reportedly Liang Wenfeng's frustration that remarks he made during first-round investor meetings had spread online — a reminder that as DeepSeek's investor base grows, keeping a low profile is getting harder.
2. The voting-rights structure is drawing outside scrutiny. Most external investors have no vote and a five-year lock-up, while only the state-backed National AI Industry Investment Fund gets direct voting rights with no lock-up. This is unverified beyond what's been reported by outlets like Forbes and CIW, and DeepSeek hasn't publicly addressed the governance questions this raises about state influence versus founder control.
3. The valuation-to-revenue gap remains unresolved. A 140–150x P/S ratio is extreme by any industry's standard — even top-tier, high-growth SaaS companies typically trade at 30–50x. Whether this valuation holds up depends on whether DeepSeek can convert its technical lead into scaled enterprise revenue after a STAR Market listing — something the market hasn't yet tested, and a live example of the broader "AI valuation bubble" debate playing out in real time.

To be clear: every detail above about deal size, valuation, and ownership structure comes from anonymous-sourced reporting (Caijing, Reuters, Bloomberg, Forbes, among others). DeepSeek has not officially confirmed the terms of its second round, so treat the specific numbers as reported-but-unconfirmed until a formal announcement.

Why It Matters: STAR Market Rule Changes, China's Compute Push, and the Global AI Funding Race

• China just rewrote its listing rules for unprofitable AI companies. On June 17, 2026, the Shanghai Stock Exchange announced at the Lujiazui Forum that it was expanding its "fifth listing standard" on the STAR Market to cover AI companies — meaning a company doesn't need to be profitable, or even have significant revenue, to file, as long as its technology is strong enough. That rule change is the regulatory backdrop making DeepSeek's planned late-2026 IPO filing (targeting a 2027 listing) plausible in the first place.
• DeepSeek just abandoned a five-year "no fundraising, no IPO, no commercialization" policy. For years, DeepSeek was funded entirely by founder Liang Wenfeng's quant fund, High-Flyer, and refused outside capital. That policy ended with the first round in June 2026 — a symbolic moment for China's AI sector broadly, as rivals Zhipu and MiniMax have already listed in Hong Kong and Moonshot keeps raising at an accelerating pace.
• This is part of a global re-pricing of frontier AI labs. OpenAI was reportedly valued at $300 billion in 2025, and Anthropic's valuation reportedly surpassed OpenAI's by June 2026. Seen against that backdrop, investors paying a steep premium for a globally competitive Chinese lab is, in part, a bet that Chinese model companies can keep pace technically while serving a market as large as any economy's.
• Compute self-reliance is the subtext. Reports that DeepSeek is developing its own AI inference chips and building out its own data centers mirror a broader trend among leading Chinese AI labs to pair frontier model development with domestic compute and chip strategies — which also explains why a company with comparatively modest revenue still needs to raise capital this fast and this often.

Bottom line

If the reported second round closes, DeepSeek will have raised over $14 billion in under five months and pushed its pre-money valuation toward about $70 billion — but until there is an official announcement, treat every figure as "in talks." The real driver is the compute bill and the IPO window, not a single valuation headline.

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Sources

• Caijing magazine reporting, as relayed by Sina Finance and Wall Street CN
• The Standard (HK), Gate News, ChainCatcher coverage of the restarted round
• Forbes: "DeepSeek Just Raised $7.4 Billion. Here's The Catch."
• South China Morning Post, Caixin Global, Reuters, Bloomberg reporting on DeepSeek's first round and IPO preparations
• CIW on the cap table structure; TechCrunch and Hugging Face write-ups on DeepSeek-V4
• 36Kr, TMTPost coverage comparing Moonshot AI, Zhipu AI, and MiniMax valuations

Most figures above come from anonymous sources and media reports rather than official company disclosures. Verify the latest confirmed numbers before publishing; terms may change.